See How Our Team Helps You With Debt Negotiations
A Story of How We Can Help with Negotiating Debts with Your Creditors
We helped a small business owner deal with a creditor who was pressuring the business for repayment of loans. Based on the circumstances we presented, the creditor wrote off the debts in full and released the security against the family home.
Background
Our client was a small business owner operating a retail store specialising in merchandise printing. The COVID-19 outbreak had caused significant losses to many businesses, with small businesses being particularly vulnerable. Our client was no exception. The increasing costs of living, lack of ability to trade the business during the COVID-19 outbreak, and increasing business debt led the client to seek alternative funding to cover ongoing business operations. Unfortunately, while obtaining funds was relatively easy, repaying the loans was nearly impossible due to poor cash flow and worsening economic conditions, including rising interest rates impacting non-essential consumer purchases.
Our client approached us for help. While the business gave her a sense of purpose and work, the financial problems put significant pressure on her health and quality of life. The thought of potential bankruptcy she was facing created another layer of stress.
How We Helped
We took immediate steps to collate all information that would be relevant to give our client the best support. We learned that our client’s circumstances were difficult:
- Our client's sole source of funds came from income protection due to health issues.
- She had to employ staff to help with physical work she could not perform at the store due to mobility issues, which put extra financial pressure on the business.
- She and her spouse owned a house, which was used to secure the loans.
- The house was purchased from a personal injury claim received by her spouse. In the event of bankruptcy, the house would not be available to creditors.
- Financial analysis of the business strongly indicated that the loans could not be repaid in the foreseeable future.
- A review of the lending process revealed that the loans were granted without conducting any due diligence, including review of the business financials and assessments of whether the loans could realistically be repaid and in what timeframe. The terms of the loans were exorbitant given the circumstances.
- The company was deregistered.
End Result
- We contacted the lender who was pressuring our client to recover the debt and arranged with the creditor to immediately suspend any recovery actions against our client, including any adverse credit report listing until such time a resolution was reached between the parties involved.
- We sought a release from the debt in full, given the vulnerability of our client.
- After negotiation with the creditor and presenting the case on behalf of our client, the creditor agreed to our proposal, released the entire debt in full and released the security held against the client's property.
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